« July 2007 Table of Contents
Seafood's healthy profile an ideal fit on fast-casual
By Steven Hedlund
July 01, 2007
The fast-casual evolution is taking the quick-service
by storm, igniting growth in an arena
traditionally dominated by
Long John Silver's and the
mom-and-pop seafood shacks that pepper the nation's
Americans' burgeoning appetite for food that's healthful and
more flavorful than conventional fast food but prepared and
served faster than at casual, or family-style, establishments
is prompting QSRs to refocus their concepts. Veteran seafood
QSRs, such as Captain D's and Ivar's Seafood Bar, are enhancing
their menus with more
healthful products, and newcomers,
including Fish Express,
California Fish Grill and Nemos
Seafood, are expanding their
presence by opening
Seafood is an ideal fit on fast-casual menus. It's lean,
it's high in heart-protective omega-3 fatty acids, it cooks
quickly and it encourages menu creativity. Plus, it's
increasingly available at a consistent supply and price, thanks
to the proliferation of farmed product worldwide.
These days, fast-casual menus rival casual menus. Zesty
Shrimp Scampi, Grilled Chipotle Salmon Sandwich, Blackened
Mahimahi Wrap, Charbroiled Halibut and Cajun Seared Ahi Tuna
Salad are among the menu items at seafood QSRs. Just a few
years ago, they were limited to fried fish sandwiches and fried
Americans' dining-out habits have changed a lot in the past
few years, say restaurant analysts and operators. Americans are
more health conscious, more adventurous eaters and more
Additionally, rising gas prices are eating away at
consumers' disposable income, forcing them to trade down from
casual to fast casual, says Darren Tristano, executive VP of
Technomic, a Chicago-based research and consulting firm.
Consumers are watching their gas gauges, not necessarily their
wallets. So instead of driving 10 miles to the nearest casual
restaurant, they're grabbing a meal at the fast-casual joint
that's only two or three miles from home, notes Tristano.
Essentially, the tab is what sets fast casual apart from
conventional fast food. The per-person check averages $7 to $10
at fast casual and less than $7 at fast food, says
However, there are numerous variances between fast casual
and fast food. At some, but not all, fast-casual chains there's
no drive-through, the décor is more modern and sophisticated,
the staff delivers orders to patrons' tables and food is made
to order and perceived as "healthier" and "fresher."
"We're seeing a shift not in the type of food [that QSRs
menu] but in the type of cooking methods [they] use," says
Tristano. "We're seeing a movement away from fried and toward
All of these factors are fueling the growth of fast-casual
brands under the QSR umbrella. U.S. sales of the leading
fast-casual chains doubled, to $11 billion, from 2001 to 2006,
according to Mintel, a London-based research and consulting
firm. They're projected to increase 62 percent from 2006 to
2011, accounting for inflation.
"There's still a lot more room for growth," says Billy
Hulkower, senior editor and consumer market analyst for
Time for change
Long John Silver's and Captain D's are the only seafood QSRs
in Technomic's 2007 Top 500 Chain Restaurant Report, released
in May. Long John Silver's ranked 51st, with 2006 sales of
approximately $740 million, while Captain D's ranked 67th, with
2006 sales of $513.4 million.
Long John Silver's has struggled since Yum! Brands acquired
the then 33-year-old chain, along with A&W All American
Food, from Yorkshire Global Restaurants in 2002.
Since then, Long John Silver's has shrunk from 1,225
restaurants to 1,156. Bob Ruckriegel, the largest Long John
Silver's franchisee, with 102 locations, told the
Courier-Journal of Louisville, Ky., last month that his sales
are stagnant and per-store profits are down over the past five
Captain D's, on the other hand, is expanding. The 600-unit
chain, based in Nashville, Tenn., and concentrated in the
Southeast, plans to open 20 to 25 restaurants this year. The
first multi-brand unit combining Captain D's and Del Taco, the
Mexican QSR that Sagittarius Brands owns along with Captain
D's, is due to open in Mount Juliet, Tenn., this month.
Captain D's is trying to set itself apart from its
competitors, including Long John Silver's, by reinventing
itself as a fast-casual seafood chain instead of a seafood QSR
that menus predominantly fried fish.
Last summer, Captain D's unveiled a new menu, logo and
restaurant design at its Donelson, Tenn., location, where the
first Captain D's opened in 1969.
"Captain D's is definitely pushing more toward fast casual,"
says Paula Vissing, senior VP of purchasing for the chain. "But
the real objective is to find menu items people want."
The new menu includes several grilled-seafood items,
including Alaska salmon, tilapia, catfish and shrimp; pasta
dishes, such as Zesty Shrimp Scampi and Creamy Shrimp Alfredo;
and sandwiches and salads, such as Ciabatta Salmon Sandwich and
Grilled Salmon Salad. Previously, most menu items were
Captain D's is also menuing flounder for the first time and
will add mahimahi in the near future, says Vissing.
The chain also doubled the
number of sides it offers to 14,
adding Garlic Mashed Potatoes, Roasted Red Potatoes and
Macaroni & Cheese, among others. More sides will be added
to the menu in the near future, she notes.
"Our customers want healthier options, and Captain D's wants
to move that way," says Vissing. "It really is amazing. People
are really looking for these types of menu items in an
To accommodate the host of new grilled-seafood items,
Captain D's is gradually adding grills to its kitchens. The new
restaurant design also includes a more contemporary exterior
and a more relaxing ambiance inside, with new seating, a WiFi
connection and power outlets for laptops.
"We're trying to create an experience," says Vissing. "It's
a place our guests can hang out in for a little while."
All 32 Nashville-area units are scheduled for remodeling by
this fall, and the remaining units will be gradually
refurbished over the next three years.
"There are more consumers in quick service and fast casual
now, and that speaks to the opportunity. It's enormous," says
Vissing. "Sure, there's more competition now, but we're doing
all the right things. We need to make sure we deliver the best
experience possible. We need to stay focused on what we do
At the same time, Captain D's needs to continue offering its
customers value, explains Vissing.
"To some, that's a $2.99 meal. To others, that's a $7.99
meal," she says. "That's why variety is important."
Ivar's Seafood Bar, with 24 restaurants in Washington and
one in San Jose, Calif., is in the same boat as Captain D's.
The Seattle-based concept, established in 1983 when 14 failing
Arthur Treacher's Fish & Chips restaurants were converted
into Ivar's Seafood Bar, is trying to broaden its appeal
without forgetting its Pacific Northwest roots.
In the past year and a half, Ivar's has added grilled
salmon, halibut and mahimahi to its menu and is looking at
adding more entrée salads beyond salmon, shrimp and Dungeness
Caesar salad, says Dave Fechter, director of operations for
Ivar's. The goal is to attract more health-conscious consumers,
"If we're going to grow our business, we need to expand our
menu," says Fechter. He hopes to see Ivar's grilled-seafood
items increase from 8 percent of total sales to 15 to 20
percent in the near future.
In addition to growing its menu, Ivar's is looking at
revamping its restaurant design to draw younger generations of
seafood fans. The chain has hired BCRA, a Tacoma, Wash.,
design firm, to assess a new restaurant design and Buxton, a
Fort Worth, Texas, marketing firm, to help with customer
analytics and site development.
Still, Ivar's isn't abandoning its quality seafood roots.
The chain still uses Pacific true cod in its fish and chips,
its No. 1 selling menu item, even though prices of the fish are
Rising seafood prices "are a big challenge," says
New kids on the block
Increasing seafood prices and the operational challenges
associated with menuing the highly perishable protein have
deterred fast-casual start-ups from launching seafood-based
But a few new fast-casual seafood concepts are starting to
sprout up around the country, including Fish Express in the
Dallas area, California Fish Grill in Southern California and
Nemos Seafood in the Mid-Atlantic.
The idea for Fish Express, says Mike Hoque, the concept's
founder and CEO of Hoque Enterprises in Dallas, originated from
Go Fish, Hoque's upscale seafood restaurant in Addison,
"I asked myself, 'What can I do to bring the same group of
people to a seafood restaurant two to three times a week?'"
So he opened a 2,500-square-foot, 80-seat Fish Express
restaurant in North Dallas in January. Hoque plans to open five
more units in the Dallas area in the next few months and is
exploring opportunities in the Atlanta and Houston and Austin,
Texas, markets. He hopes to open a total of 30 company-owned
units in two years and is trolling for business partners to
help him reach that goal.
"We're doing really well," says Hoque, adding that the North
Dallas restaurant is projected to bring in $1.1 million in
sales this year. "We're surpassing our expectations."
The Fish Express menu features several grilled-seafood
items, such as Atlantic salmon, yellowfin tuna, mahimahi,
catfish, tilapia and Gulf shrimp. It also includes sandwiches,
po'boys, wraps, tacos, quesadillas, soups and salads.
"We're very focused on health," says Hoque. "My goal is to
change the way people eat."
At Fish Express, the per-person check average is $10, orders
are delivered to the tables and customer traffic is evenly
split between lunch and dinner, a feat that many fast-casual
concepts struggle to accomplish.
California Fish Grill has also boosted customer traffic at
dinner. Victor Topete, the chain's owner in Fullerton, Calif.,
opened the first California Fish Grill restaurant in Gardena,
Calif., in 1998 and has since added units in Cypress, Anaheim
Hills and Irvine, Calif.
The largest unit is 3,330 square feet with 155 seats, while
the smallest unit is 2,000 square feet with 65 seats.
At the Gardena location, orders are still picked up at the
counter, and paper plates and plastic utensils are used. But
Topete decided to class up the operation to attract a bigger
evening crowd when the Cypress location opened in 2001, so
orders are delivered to the tables and dishware and silverware
are used there and at the Anaheim Hills and Irvine
"It's working to our advantage," he says. "We try not to be
The California Fish Grill menu consists of several
charbroiled-seafood items, a few fried-seafood items, tacos,
burritos, chowders and salads. The fish, including basa,
salmon, mahimahi, yellowfin tuna and swordfish, is delivered
daily and cut in store. The per-person check average is $11 to
"I think the price point is right," says Topete. "We're
trying to appeal to frequent
customers. We offer what you'd
essentially get at a [casual] restaurant but for less money.
It's not easy. But if we put out a good product people will
keep coming through the door. We try not to dwell too much on
"We're doing well," he adds. "We found our niche. There was
definitely a void in [fast-casual] seafood. The options were
limited. But there's still more opportunity out there."
Chris Spears, CEO of Nemos Seafood in Linden, N.J., couldn't
Since 2005, he and his business partner, CFO Gary Williams,
have opened 11 Nemos restaurants, and several franchisees are
under contract to open an additional 94 restaurants in New
Jersey, New York, Pennsylvania and the Atlanta area in the next
few years. "It's a wide-open market," he says.
Spears aims to expedite the chain's growth by selling
franchises in blocks of 20 restaurants, whereby franchisees
become partners in the company. Units are relatively
inexpensive to open, only $187,000 with 20 percent down, which
is attracting a lot of interest from franchisees, he
Nemos is unique because take-out and delivery represent the
majority of the chain's business; restaurants contain an
average of only 20 seats.
Like other fast-casual seafood concepts, Nemos is adding
grilled-seafood items to its menu - and grills to its kitchens
- with health in mind. Its
menu already features steamed,
broiled and "lightly" fried seafood items, such as shrimp,
spiny lobster tails, snow crab legs, Dungeness crab, crab
cakes, mussels, catfish, tilapia and whiting.
Anchored by the belief that Americans are watching their
waistlines now more than ever, fast-casual seafood newcomers
like Nemos and veterans like Captain D's and Ivar's Seafood Bar
are poised to fill the vacancy between conventional fast food
and casual dining.
Associate Editor Steven Hedlund can be e-mailed at